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UPDATED: Deadline looms as House, Senate $10m apart on budget

CONCORD -- Wednesday night at deadline, House and Senate budget negotiators remained at an impasse with a difference of $10 million over a nearly $11 billion, two-year budget.

Negotiators were scheduled to return at 7 p.m. Wednesday evening to review a Senate revision to a plan leading to a legislative vote on Medicaid expansion under the Affordable Care Act, but that had not occurred by 9 p.m. Medicaid expansion and the amount of money budget writers have available to spend continue to be the sticking points between the two bodies as they face a noon deadline today to reach an agreement.

The House wanted to increase lapses — money state departments do not spend although it is appropriated — by $20 million and House Finance Committee Chair Mary Jane Wallner, D-Concord, said Gov. Maggie Hassan will work with department heads to meet those goals in reductions across the budget and not just in personnel costs as the Senate proposes.

The House wants to use the lapse money to reduce a Senate-approved $50 million across-the-board reduction in personnel costs, $20 million from state general funds.

The House also wants to fund the recently announced labor agreements with four state employee unions costing about $17 million.

But Senate Finance Chair Chuck Morse, R-Salem, said labor costs amount to $37 million. The Senate agreed to fund the new labor agreements and half the across-the-board personnel cuts, but will not agree to additional chagnes, he said.

"To go any further means raising revenues," Morse said, "and the Senate is not going to raise revenues."

He said both sides have come a long way Wednesday but he noted there were many items both the House and Senate want to fund that will not be because of the money for the new labor agreements.

Morse listed some of those items as a $7 million reduction in the Health and Human Services Department, restoring $750,000 for the Department of Revenue Administration, and $1.3 million for the Veterans Home. Morse said the Senate does not believe all $20 million in lapses is realistic but would agree to $10 million.

But the House continues to insist there be no across-the-board cut in personnel costs.

"We feel the workforce is so important to us that unless we can get to the point (where we do) not reduce staff," Wallner said, "we are still at a standoff. Where are we going?"

The two sides have agreed to about $20 million in new revenue from such things as a tax change in non-cigarette tobacco products that will provide about $5 million and happens automatically July 1.

But the House wants revenue estimates increased an additional $30 million mostly in business, meals and rooms, and the real estate transfer taxes, but the Senate has refused to go along. The two sides spent little time in public session Wednesday as they tried to negotiate an agreement on both Medicaid expansion and the operating budget for the next two years.

Many of the major items in the House and Senate approved budgets are identical such as $100 million more for higher education and $28 million for the mental health system. Both sides increased the money to offset uncompensated care absorbed by hospitals and other health care providers, but did that in different ways.

Several popular Health and Human Services initiatives — eliminating the developmentally disabled wait-list for services and the Children in Need of Services program — receive about the same amount of money in both the House and Senate budgets.

Budget negotiators are trying to reach a compromise on the state's next biennial budget that goes into effect July 1.

The Senate approved a budget of $10.7 billion, while the House's budget is $11 billion. Both the House's and Senate's plans spend approximately $2.8 billion general fund money.

Negotiators' deadline is Thursday at noon for the Senate and 4 p.m. for the House.

Without an agreement, lawmakers would likely approve a continuing resolution so state government would continue to operate after July 1 although no budget would be in place.